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ASSIGNMENT
ON
Market Analysis Of Volkswagen New Beetle
Submitted to: Submitted By: Dr. Liquat Ali Butta Singh (5871) Gagandeep Uppal (5870)
MBA-II Sec C
SCHOOL OF MANAGEMENT STUDIES,PUNJABI UNIVERSITY PATIALA
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ACKNOWLEGEMENT
“When you give yourself, you receive more than you give.”
The concepts learnt in academics are of no importance until they are practically applied.
In today’s world it is imperative for the students of any Post- Graduate course to keep pace with
the changing technology innovations taking place across the world. In alignment with this, we
prepared a market analysis report in our 3rd semester of MBA.
We would like to express our sincere gratitude to Dr. Liquat Ali for giving us the
opportunity to work on the Market Analysis for a Project. We would like to thank our friends for
giving us their valuable support. It was very enriching and enlightening experience. Last but not
least, we thank the almighty, and may he stand with all of us.
Butta Singh, Gagandeep Uppal
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CONTENTS
Page
List Of Graphs 4
Sr. No Chapter
I Introduction Market Analysis 5-11
II Automotive Industry and Volkswagen 12-16
III Review of literature, Rationale, Objectives 17-19
IV Research Methodology 20-21
V Data Analysis and Interpretation 22-26
VI SWOT Analysis 26-34
VII Findings and Conclusion 35-36
Bibliography 37
Annexure 38-39
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List of Graphs
GRAPHS PAGE
5.1 Car brand being used currently 22
5.2 Type of car segment preferred 23
5.3 Affordable money for purchasing a car 24
5.4 Factor influence while purchasing a car 25
5.5 Preference of Foreign Brand 26
CHAPTER I
Introduction: Market analysis
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Market analysis is a necessary part of planning a profitable business. Invest time in this crucial
step now and reap the rewards of a successful business. Before investing any money in our
business, we must gather information about our potential customers and the demand for of
service. This information, or market analysis, is a necessary part of planning a profitable
business. Invest time in this crucial step now and reap the rewards of a successful business.
Benefits of market analysis
1) Faster Cash Flow
Knowing who our customer is, what we need, and where to find them is vitally important.
Targeting the right people is crucial for generating cash flow in the shortest time possible.
2) Greater Market Share
An examination of current market conditions tells us who our competitors are, the size and
location of the market, current competitor pricing and promotional strategies, and types of
market niches which are underdeveloped.
Positioning our product for greatest exposure, while creating an image of quality and value for
our product, allow us to become a serious player.
3) Reduced Expenses
A leading cause of business failure is lack of capital - the business runs out of start-up funds
before becoming profitable. It's important to make every penny count. We reduce expenditures
by trying to predict outcomes before taking action. There is always a certain amount of risk with
any business venture; however, analyzing the market reduces that risk.
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Conduct a Market Analysis
Overview
Whether we are starting a new business or launching a new product, conducting a marketing
analysis is the first step in determining if there is a need or audience for your idea. Knowing the
market's needs and how it is currently serviced provides us with key information that is essential
in developing our product/service and marketing plan. Too often, businesses spend thousands of
rupees launching a "new" idea with a limited market because of competition. The owner is
forced to reevaluate his strategy and determine if there is room for another player. Although the
quality of the product is critical, our development of the best product on the market will not
necessarily correlate with the most sales. Up to 50 percent of a product's price can be for
marketing. The company who wins the marketing game generally will capture the larger share of
the market.
The marketing analysis process can be broken down into six steps:
1. Defining the problem.
2. Analysis of the situation.
3. Obtaining data that is specific to the problem.
4. Analysis and interpreting the data.
5. Fostering ideas and problem solving.
6. Designing a plan.
1. Defining The Problem
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Defining the problem is crucial to conducting a successful marketing analysis. This may require
a great deal of time but it is well worth the time and energy expended. Defining the objectives is
crucial to a successful marketing campaign. Many individuals waste valuable time performing
good research on the wrong problem.
Many companies fail to understand the nature of the problem before trying to solve problems
related to sales. A classic example occurred in the soft drink industry when Coke and Pepsi, the
two top soft drink rivals increased the intensity of marketing efforts to battle for higher sales. At
the same time, Dr Pepper's revenues began to decline, a problem that was attributed to a weak
promotional campaign. Subsequently, the "Be a Pepper" slogan was instituted. Although the ads
were a hit, revenues continued to decrease. The marketing managers had to reanalyze their
problem.
2. Analysis of The Situation
An analysis of the situation is an informal survey of what information is available in the problem
area. The analysis will help define the problem and ascertain the need for additional information.
This process entails informal talks with informed people. Informed individuals can be others in
the company or outsiders with knowledge about the industry or product. In some instances,
customers are contacted to provide information.
When the marketing manager is unfamiliar with the situation, the analysis step is of primary
importance. It is important to understand the problem area - including the nature of the target
market, competition, the marketing mix and the external environment. Without this knowledge,
costly mistakes may result. An example of this problem would be a retailer who wants to survey
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his customers. A research firm is hired to do in-store interviews. However, as an example, the
contracted firm is not aware that many of the stores are in the process of being renovated. As a
result, the information collected reveals the customer's focus on the appearance, noise level and
difficulty finding items due to construction. The information would be of no value.
The analysis should focus on both primary and secondary research.
Primary research is research that is proactively created for a specific purpose. Primary research
may include focus groups, qualitative surveys and phone interviews. This is information we
collect our self.
In contrast, secondary research is research that has already been conducted for other purposes.
From it valuable information can be taken. Secondary research can be found in libraries, online,
through periodicals, books, etc. The easiest and most efficient way of accessing this type of data
is on the Internet.
3. Obtaining Data Specific to The Problem
The next step requires gathering primary research and performing a formal research project.
Many approaches can be used to collect primary data. The purpose is for the research to identify
what customers think about some topic or behavior patterns. Research can be done in person or
through a survey. Questioning can be qualitative or quantitative. Another research option is to
use observation of customers and their purchases or utilization of a product or service.
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Qualitative research utilizes open-ended questions to obtain in-depth answers. Closed-ended
questions requiring yes or no answers are avoided. The idea is to have people share their
thoughts on a topic without giving them extensive directions or guidelines.
Quantitative research differs from qualitative in that it gathers parametric statistical
information, i.e., information with a number to it. Sample sizes are generally larger and more
representative of the market. From the statistics or data generated, conclusions can be drawn.
Survey research is usually quantitative in nature. It seeks structured responses, which can be
summarized in numbers, like percentages, averages or other usable statistics.
4. Data Analysis and Interpretation
Data analysis and interpretation is critical in analyzing the market. What does this information
mean? Can one use the data in a constructive way to define the problem and then establish a
plan? In quantitative research, this step most often involves statistics. In the marketplace one can
find many statistical packages (computer-based) to analyze the data.
It is impossible to collect data on every person in a select population; therefore samples are
necessary. A sample population is a part of the relevant population. How well the sample reflects
the relevant population dictates its validity. Results from a sample that is not representative will
negatively impact your marketing.
In addition to sampling and validity issues, marketing managers must make sure the data
supports the conclusions drawn. This is the interpretation step. Despite use of the correct
statistical tool and accurate calculations, the interpretation could be wrong. Example of Data
Misinterpretation: In a survey, parents were asked to rank five infant car seats for ease of use.
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They were to rank the seats in order from "most preferred" to "least preferred." One car seat was
ranked first by slightly more respondents than any other car seat. The researchers reported that it
was the most liked car seat by parents with infants. They failed to report that 70 percent of the
respondents preferred that particular car seat least. So, the first-ranked car seat was most
preferred by only 30 percent of the parents.
5. Fostering Ideas and Problem Solving
In this step, the research results are used to make marketing decisions. The findings should be
applied in marketing planning. If the research doesn't provide the information necessary to make
these decisions, the company, whether small or large, has wasted its time, money and manpower
on unnecessary data. The final step must be anticipated throughout the entire process.
6. Marketing Plan
This six-step process of market analysis is critical in designing a marketing plan that is tailored
to your specific product or service. The process can be extremely helpful in disclosing a
significant but previously unrecognized problem. By finding and focusing on the real problem,
the researcher and business owner can move quickly to a useful solution.
A marketing plan shows the specifics of how you will market or attempt to sell your product or
service. To reiterate the purpose of this discussion, the marketing plan is to provide us with
guidance in analyzing your market. Various resources and software packages are available to
enhance our marketing efforts. Software packages are numerous and include:
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Business Plan Pro, Palo Alto Software.
Small Business Advantage, Encore Software.
Jay Conrad Levinson's Guerilla Marketing, Houghton Mifflin Interactive.
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CHAPTER II
Automotive industry
The automotive industry designs, develops, manufactures, markets, and sells the world's motor
vehicles. The automotive industry is one of the most important economic sectors by revenue.
The term automotive industry usually does not include industries dedicated to automobiles after
delivery to the customer, such as repair shops and motor fuel filling stations.
Worldwide Trends
In 2007, worldwide production reached a peak at a total of 73.3 million new motor vehicles
produced worldwide.[1] In 2009, worldwide motor vehicle production dropped 13.5 percent to 61
million. Sales in the U.S. dropped 21.2 percent to 10.4 million units; sales in the European Union
(supported by scrapping incentives in many markets) dropped 1.3 percent to 14.1 million units.
China became the world's largest motor vehicles market, both by sales as by production. Sales in
China rose 45 percent in 2009 to 13.6 million units.[2] In recent years, private Chinese
manufacturers emerge.
About 250 million vehicles are in use in the United States. Around the world, there were about
806 million cars and light trucks on the road in 2007; they burn over 260 billion gallons of
gasoline and diesel fuel yearly.[3] In the opinion of some, urban transport systems based around
the car have proved unsustainable, consuming excessive energy, affecting the health of
populations, and delivering a declining level of service despite increasing investments. Many of
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these negative impacts fall disproportionately on those social groups who are also least likely to
own and drive cars. The sustainable transport movement focuses on solutions to these problems.
Automobile industry in India
The Automobile industry in the Republic of India is the seventh largest in the world with an
annual production of over 11 million vehicles and exports of about 1.5 million. In 2009, India
emerged as Asia's fourth largest exporter of automobiles, behind Japan, South Korea and
Thailand. By 2050, the country is expected to top the world in car volumes with approximately
611 million vehicles on the nation's roads. A major chunk of India's car manufacturing industry
is based in and around the city of Chennai and hence it is known as "Detroit of India". Chennai
accounts for 60 per cent of the country's automotive exports.
Volkswagen India
Volkswagen India Private Limited is a subsidiary of Volkswagen Group Sales India Private
Limited that assembles, manufactures and distributes Volkswagen vehicles in India. It was
established in 2007.
Manufacturing Facilities
Volkswagen India Private Limited operates a manufacturing plant in Chakan which is capable of
producing 110,000 vehicles per annum. The plant is also shared by Skoda Auto India Private
Limited for assembling the Skoda Fabia.
Manufactured/Assembled Locally
Volkswagen Polo
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Volkswagen Jetta
Volkswagen Passat
Volkswagen Vento
Imported
Volkswagen Beetle
Volkswagen Phaeton
Volkswagen Touareg
Volkswagen, one of the largest car manufacturers in Europe, is betting big on India with its small
car portfolio. Though India contributes a mere 0.3% to the global sales of Volkswagen group, the
company is planning to increase its market share in the country by 8 to 10% in the next four-to-
six years.
Volkswagen Beetle
The Volkswagen Beetle, also known as the Volkswagen Type 1, was an economy car produced
by the German auto maker Volkswagen (VW) from 1938 until 2003 with over 21 million
manufactured in its air-cooled, rear-engine, rear wheel drive configuration. Its platform
ultimately gave rise to successful variants, including the Volkswagen Karmann Ghia and the
Volkswagen Type 2 van.
In the 1950s, it was more comfortable and powerful than most European small cars, having been
designed for sustained high speed on the Autobahn, and ultimately became the longest-running
and most-produced automobile of a single design. It remained a top seller in the US, even as
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rear-wheel drive conventional subcompacts were refined, and eventually replaced by front-wheel
drive models — owing much of its success to high build quality and innovative advertising.
New Beetle
In 1994, Volkswagen unveiled the Concept One, a "retro"-
themed concept car with a resemblance to the original
Beetle. Designed by J Mays and Freeman Thomas at the
company's California design studio, the concept car was based on the platform of the
Volkswagen Polo. Strong public reaction convinced the company to develop a production
version which was launched as the New Beetle in 1998, based on the Golf IV's larger platform.
New Beetles are manufactured at Volkswagen Group's Puebla, Mexico assembly plant where the
last lines of factory-built air-cooled Beetles were removed from production.
A classic
Volkswagens are famed for their traditional quality and the New Beetle is naturally no exception
all materials used is carefully tested and has outstanding workmanship. The body is galvanized
giving reliable protection against rust. The high-strength panels on the New Beetle are given
additional stability at specific points which achieves a very high level of torsional rigidity. The
precision fit of body parts results in picture-perfect dimensions.
Self assured
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Yes, we know it’s a small car. But when it comes to safety, the New Beetle gives you a feeling
of security the moment you are seated inside. With ESP, ABS and other safety features in tow,
the New Beetle comprises of a comprehensive active safety package, making it one of the safest
vehicles in its class. We have also equipped the New Beetle with a passive safety package that
gives you the greatest possible protection. The carefully matched restraint system, consisting of
four airbags and a 3-point inertia reel seat belt system at front and rear, is also part of the
standard equipment. Go ahead and enjoy the drive.
Comfort and convenience
In a New Beetle, you enjoy the comfort and convenience afforded by an exclusive standard
specification. Right from the 116PS (85 KW) engine version, it includes electrically adjustable
and heated door mirrors, power steering, colour-keyed door mirror housings, door handles and
bumpers and, of course, the legendary flower vase.
CHAPTER III
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Review of Literature
Kathuria (1996) analyses the Commercial Vehicles (CV) industry in India in a detailed
manner, dwelling on the concepts of vertical integration and subcontracting, production
technology and technological change. After an overview of the global auto industry, Kathuria
traces the developments in the Indian auto industry from the 1950s to 1991. To evaluate the
competitiveness of Indian commercial vehicles manufacturers in the domestic market, growth
trends, structural trends, market shares, profitability, productivity ratios, prices, quality, dealer
network and performance are analysed. Macro and micro performance of India’s vehicle exports
with major markets and Indian vehicle characteristics have been outlined, along with an analysis
of global demand patterns.
Humphrey (1999) compares the impact of globalisation on supply chain networks in the
auto industry in Brazil and India. According to Humphrey, global auto industry hubs were
situated in three regions, namely, North America, Western Europe and Japan. Brazil and India
are examples of the countries which could develop the indigenous auto industry despite not being
situated very close to any of these regions. Hence, Humphrey compares the auto industries in
these two countries. This study considers auto industry as a producer-driven commodity chain,
wherein global auto assemblers control the entire supply chain from components to dealerships.
Veloso and Kumar (2002) provide an overview of the major trends taking place in the
global automotive industry, emphasizing on the Asian market. Consumer preferences,
government regulations and intense competition have been driving the firms towards new
technologies, modernization, research and changes in design and production. Market saturation
in Triad regions (the United States, Western Europe and Japan) and rapid emergence of markets
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in Asia have led to increasing diversity in market needs. As a result, there are many models and
segments coming up rapidly.
ACMA (2006) presents the recent trends in the Indian auto industry as a whole and their
implications for automotive supply chain in India. The market-oriented growth and growing
automobile industry in India have ensured bright prospects for the Indian auto component sector,
which is vibrant and competitive. Huge future growth potential of the automobile industry and
increased access to consumer finance may lead India to a place among the top five automotive
economies by 2025.
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RATIONALE OF THE STUDY
As Indian automotive industry is one of the major growing Industries in the world. With
the impact of globalization, there are many new players in the Indian auto industry. As the
Volkswagen launched its new Beetle in India, which is mid-sized luxury car priced quite high.
So the research was carried out to have a market analysis regarding the new Beetle in Indian
Market.
OBJECTIVE OF THE STUDY
1. To conduct the market analysis of Volkswagen New Beetle.
2. To conduct the SWOT analysis of the car.
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CHAPTER IV
RESEARCH METHODOLOGY
Research Problem
Market Analysis of Volkswagen New Beetle
Research Design
Research Design is exploratory and descriptive which helps me to explore and describe
the market potential and market factors to be considered for New Beetle by Volkswagen.
Sampling Design
The study aimed to survey 15 samples from Patiala. Samples consist of the customer or
prospects. The respondents were selected on the basis of convenience sampling.
Data Collection:
Both primary and secondary data have been collected for meeting the objectives of the
current study.
For the purpose of the collection of the primary data, personal interview of the
respondents was conducted. An unbiased, undisguised structured questionnaire was prepared
which was administered to the respondent for the purpose of getting the information. With the
reference of certain previously carried studies, certain statements for getting out the customer
perception were formulated and these were clubbed together to formulate the questionnaire.
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For the purpose of secondary data, secondary sources of information like magazines,
newspapers, journals; studies conducted in past etc. have been referred. The main sources of
secondary data in the study
1. Magazines
2. Websites
Analysis Techniques
The questionnaire is having the alternative choices. Questions having alternative choices
have been analyzed by taking percentages.
Scope of the study
The scope of the study is limited to the customers visiting to the Maruti & Tata
Showroom in Patiala.
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CHAPTER V
Data Analysis and Interpretation
5.1 Car brand being used currently
Analysis and Interpretation: Majority of the respondents are using the brand Maruti Suzuki
followed by Hundai. Data shows that majority of customers prefer to buy cars of Maruti Suzuki,
because it is the most popular, famous brand in Indian Automobile Industry. The interpretation
can be made that most of the customer prefer the small and mid segment cars.
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5.2 Type of car segment preferred
Analysis and Interpretation: Results shows that mostly the customers prefer the B segment
cars followed by A segment. This shows the demand structure and preference of Indian car buyer
which is also related to his income level.
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5.3 Affordable money for purchasing a car
Analysis and Interpretation: The customer can afford 5-10 lac for buying a car, which is
mostly for the B segment cars. So interpretation can be made that the mid segment cars are
mostly preferred as compared to luxury or small segment.
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5.4 Factor influence while purchasing a car
Analysis and Interpretation: Efficiency is the most important factor that is considered while
purchasing a car. Next important factor is comfort. As India is a developing country, mostly
people prefer to purchase fuel efficient cars. That’s why Diesel cars are preferred in Indian
market.
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5.5 Preference of Foreign Brand
Analysis and Interpretation: Majority of the respondents prefer to buy foreign car brands.
Reason may be interpreted as the availability of the foreign car manufactures in India. There is
no doubt that mostly the car brands belong to abroad, but now they manufacture and assemble
their product according to Indian customers preference.
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CHAPTER VI
SWOT ANALYSIS
Strengths
It stands apart from all other cars on the road - Volkswagen Chairman Ferdinand Piece is
even amazed at the car’s appeal. “It is different, and it makes you feel different, “he said. “It’s
like a magnet”. It’s curved outline, rounded fenders and oversized lights separate it from the
other vehicles on the road. The biggest-selling car design in history gets even better - It’s cute
and trendy, more comfortable than its predecessor and there are a whole lot more luxuries and
new technologies crammed into this nostalgic Beetle. The New Beetle’s safety surpasses the rest
- The 1998 model of the New Beetle is the safest small car that has been tested by the Insurance
Institute for Highway Safety.
Weaknesses
It’s not an SUV - Americans are showing a strong trend toward purchasing Sport Utility
vehicles rather than conventional sedans. A Gallup Pole recently asked 1,003 adults: Which of
the following best describes the type of vehicle you most recently purchased or leased?
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Although recent purchase trends put sedans in the lead, projected trends are saying that
Americans are leaning toward SUVs. The survey showed that 51 percent of people planning on
purchasing within the next year are more likely to purchase and SUV compared to 39 percent
purchasing a new vehicle more than a year from now. Also an indicator, three out of four SUV
owners say their next vehicle will also be an SUV4. The Volkswagen New Beetle is termed a
“small sedan.” Looking at its competing models (which will be discussed later) I would tend to
put the New Beetle in the ‘small car’ category which shows very little market favor. Brand
loyalties favor American vehicles - The preference for American vehicles is more than three
times higher than that of European vehicles. 78 percent of people surveyed in a Gallup Pole said
that they would definitely or probably consider buying an American vehicle while only 25
percent said that of a European brand, such as Volkswagen.
Opportunities
The New Beetle has a global appeal - Americans aren’t the only ones who love this car. There
is much opportunity for growth internationally. Japan is predicted to have the Potential to be the
second-largest New Beetle market. There is also hope that Beetle mania will spread across all of
Asia.
Capitalize on nostalgic cravings - The old Bug was the biggest-selling car design in History.
Baby boomers loved their groovy cars as young adults and today’s young adults are looking to
rediscover the age that passed. As we approach the next millennium there has never been a better
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time to capitalize on the nostalgia Americans are craving. The Beetle is a strong representation of
the past and may find itself setting trends for the Future.
Threats
Can trendy stay alive? - Will the New Beetle survive as long as its predecessor? We see many
trends come and go. Does the New Beetle have what it takes to survive?
Can the Beetle be duplicated? - Would another car company trying to duplicate succeed? If the
success of the New Beetle continues there will be other car makers wanting to hop a ride on the
bandwagon. Could the New Beetle survive if another company could produce more cars of
similar attributes faster?
Will history deter some drivers? - The first Beetles were manufactured in Wolfsburg,
Germany, at a plant built by the Nazis. Although the war is long since over, there are still many
people who will treat the Volkswagen Beetle with the same prejudice and distaste they feel for
the actions of the Nazis.
Market Segmentation
The New Beetle is unique from other cars in that its market is huge. The range of interest
for the automobiles is from 16-year-olds to 65-year-olds.The car appeals to drivers of many
social classes. From college students to CEOs the Beetle has found its way into garages of all
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classes. What do all of these consumers have in common? Simple, they’re tired of driving the
same old pod-like cars and the nostalgia the Beetle gives off is comforting and energizing.
Target Markets
Volkswagen executives refuse to be pinned down on the New Beetle’s target market saying only
that it is designed for “optimists.” Yet it’s clearly aiming wide. While many of the ads sport
jokes targeted at the previous Beetle generation, others are aimed squarely at Gen-X. Edmund’s
web page on automobile reviews identifies the target buyer as “men, women, young people or
people who are simply young at heart.” The New Beetle is marketed as classic, classy, unique,
and economical. It’s for the kind of person who likes to have fun, appear fun, and stand apart
from a crowd.
Competitor Analysis
Volkswagen’s top competitors (as a company) are Ford, General Motors and Toyota. All of these
companies are very successful in the American market and provide strong competition for VW
which has been struggling in this marketplace in past years. The primary competitors for the
Volkswagen New Beetle are the Honda Civic, Fiat, Hyundai. All are included in the same
approximate price range and are comparable for size, safety features and options. Different tests
rate one above another on many aspects but tend to vary depending on the researchers. The
safety of the New Beetle does consistently rate higher than the competing models. Volkswagen
competes with a lot of worthy contenders in the automobile industry. Everyone has their own
spin on value, style and economy and changes in the market refuse to slow down.
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Social Responsibility/Ethics/Legal/Political Environment
There are a lot of cars on the road these days and increasing numbers of accidents so safety is
important as a social responsibility for auto makers. The New Beetle is keeping up to today’s
standards and far surpasses its predecessor on safety features. Energy-absorbing crush zones,
pre-tensioning safety belts, daytime running lights, antilock breaks, dual airbags, and optional
side airbags for front-seat passengers top the list of safety features. The Beetle also scores
excellent in the bumper crash-test. New for 2000 are a brake-wear indicator, improved theft
protection, and an optional cold-weather package. The New Beetle also does its part for our
society by being economical and efficient. Volkswagen offers a Turbo Direct Injection diesel
engine that gets 48 miles per gallon on the highway. On the environmental side, the New Beetle
is equipped with a CFC-free air-conditioning system. Legally, the Volkswagen is responsible for
doing its part to meet legal requirements in different states.
Distribution/Place Characteristics
The automobile industry is unique from other industries in that many people chose to order
vehicles to their specifications and are willing to wait months for them to arrive. This has been
stretched even farther with the New Beetle. During, and even before, the introduction of the
Beetle people put their names on waiting lists to purchase the car. Some dealerships had waiting
lists of over 100 names long even before the cars were released on the market. People who
wanted a silver one would take blue just to get one. Since then availability has increased
although their limited output and the constant demand keep this distribution channel interesting.
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Promotion Characteristics
Historically the Volkswagen Beetle has had one of the greatest ad campaigns in history. The
November 12, 1999 issue of the Portland Business Journal states that “The ad, and the work of
the ad agency behind it, changed the very nature of advertising— from the way it’s created to
what you see as a consumer today.” The truth behind the Bug was that it was never meant to be a
massive seller. The company hoped to sell 50,000 New Beetles in 1998 but ended up selling
about 74,000. They put the car on the market to draw attention to the entire line of automobiles
that Volkswagen offers. It certainly appears to be doing its job. Volkswagen has experienced
a 59 percent increase in sales since the New Beetle’s arrival. People are drawn into the show
room to look at the beetle and stop to take a look at the other models. The excitement the Beetle
created spread among the brand. Volkswagen is using nostalgia to market the New Beetle. The
company is investing $560 million in the advertising campaign for the car putting the spark back
into the life of their company. The new advertisements, much like the old, are very simple. One
ad from the 1060s featured a small picture of the car with the headline “Think small.” Text
highlighted the advantages of driving the small Beetle versus a big car. Overall their ads
conveyed a message of frugality and sensibility. Today’s ads maintain the same simple format
but incorporate some more modern techniques such as original music that is created just for the
Volkswagen ads. Lance Mike. Jensen of Arnold Communications, the advertising firm
responsible for the New Beetle’s latest campaign, explains “People like to feel they’re not of the
herd. If a song comes on the air that they know but other people may not know, that makes them
feel good.”
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Price Characteristics
The New Beetle is the most expensive small sedan in America today, but Volkswagen
expects a new generation to discover the bug and be willing to pay for it. The company can still
afford this higher price due to the demand for the vehicle.
International Marketing Opportunities
The New Beetles are manufactured in Mexico in a plant that has a 100,000 – a - year
capacity for output of the popular car.
The car was introduced in Europe but didn’t catch on as well as it did in the United
States. In Europe the Volkswagen Golf is still preferred over the New Beetle although one source
stated that the company may try to introduce a less expensive model of the New Beetle to the
European market to see if it will do better.
Volkswagen Group Japan KK began accepting orders for the Volkswagen new Beetle in
June of 1999. The Japanese unit of Volkswagen (originally based out of Germany) is based in
Toyohashi, Aichi Prefecture. This manufacturing group offers two models of the New Beetle
with left-hand-drive. Pending the success of its introduction in Japan, the company plans to
branch across Asia.
Internet Opportunities
Volkswagen has the opportunity to follow other car manufacturers in providing its
customers the ability to research vehicle options and order a personalized car over the Internet.
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Personalizing service is always good for a company and the more ways for consumers to buy, the
better.
Volkswagen does have several web sites that give information about the New Beetle.
Everything from pricing and dealership locations to customer testimonials are available through
the web. Due to its popularity it also receives mention on numerous other sites and I have found
it involved in numerous promotions as the prize for drawings.
GM and Ford recently announced their plans to greatly increase the amount of business
activity they conduct on the Internet. It appears that this strategy will help to increase their
efficiency and profitability as well as cutting down their costs by working online with suppliers
instead of using face-to-face encounters. If their strategy works as planned, Volkswagen would
do well to follow suite in capitalizing on the services of the Internet for bettering their business
to business activities.
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CHAPTER VII
Findings of the study
1. Maruti Suzuki is the most preferred brand among Indian customers.
2. People prefer to buy B segment cars.
3. People can spend 5-10 lacs for purchasing a car.
4. Efficiency of the car is the most important factor when purchase is made.
5. People prefer the foreign car brands because their availability in Indian market.
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Conclusion
The research was carried out regarding the market analysis for launch of Volkswagen Beetle in
the Indian market. Both the primary and secondary data was collected for this purpose. By going
with the primary data analysis and the SWOT analysis, It can be concluded that though the
Beetle is having its own USPs but it can not do well in the Indian market. First of all the prize
factor is the reason for it. A customer can have a D segment car by paying the same amount as he
is supposed to pay for Beetle. Though it is attractive in nature, but being small sized and lack of
inner space make it lower as we compare it to other cars in this price. So these factors must be
kept in mind by the Volkswagen while launching it in Indian Market.
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Bibliography
Articles
1. Odgen, Mike. “Top ad campaign of century? VW Beetle, of course.” Portland Business
Journal 12 Nov. 1999:8, v.16, i.38.
2. Cisterna, Fred. “Driving music: Volkswagen uses a mix of existing and original tunes to
get drivers going.” Shoot 13 Aug. 1999: 26, v.40, i.32.
Websites
1. http://www.volkswagen.co.in/in/en/products/Beetle.html
2. http://www.netmba.com/marketing/market/analysis/
3. www.angelfire.com/.../New%20 Beetle %20 Market %20 Analysis .pdf
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ANNEXURE
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QUESTIONNAIRE
Dear Sir / Mam, this data collected is just for the research purpose and would not be used for any other purpose.
Name ………………………………………………..…
Age ……….…
Gender: Male Female
Occupation……………………………………………….
1) Which car brand you are currently using?
Maruti Suzuki TATA Motors
Hyundai Any other
If any other, please specify……………………………
2) Which car segment do you prefer?
A segment B segment
C segment D segment
3) How much money you can afford to buy a car? 2- 5 Lacs 5- 10 Lacs 10- 15 Lacs More than 15 Lacs
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4) What factor influence you most when you buy a car?
Safety Efficiency
Comfort Brand
5) Do you prefer foreign brands?
Yes No
Can’t say